Freezone company formation is a great option for entrepreneurs when starting a new venture in UAE. With a government that encourages foreign investments and creates new opportunities for entrepreneurs, free zone company formations are on the top of any investor’s list.
The major attractions of UAE free zones are the 100 percent ownership policy, tax exemption, zero customs duty and repatriation of profits. Setting up a company in UAE can be done swiftly and is normally not an expensive affair.
Here are some points to remember before setting up a business in UAE free zone –
Choose your business activity and license
UAE free zones offer different options for your company with regards to the type of business it does and the license it needs. The free zones offer 5 types of licenses namely Free Zone Trading License, General trading License, Service License, Industrial License and Commercial license solely depending upon the type of business your establishment does.
Although some free zones specialize in certain activities, most of them allow all sort of business. If you are choosing a zone that hosts specialized activities, confirm the nature of your business before forming the company there.
Do your research well and get informed
Before you get into the actual processing of the company’s legal papers, research and be well informed about the free zone company formation. For example, you must be well informed about the difference between FZE and FZCO before entering the UAE market.
FZE or free zone establishment is a company established by a sole entity and has only a single shareholder while FZCO or free zone company is actually a limited liability company bound by 2 or more shareholders. The major difference here is in the capital requirement. You can get proper advice from business consultants, which will allow you to focus on your business and it’s necessities, while they take care of the legal formalities.
Take care of the costs involved
As an investor who wants to register a company, you will be wary of the many fees and charges paid to get everything done. Often this will make you want to go for the cheapest option available based on the costs that are sure to incur. The total cost for your free zone company is based on two things –
1. Cost of the free zone company for a year
2. Yearly renewal costs
There are packages offered by free zones, which are cheaper than direct investments but often only offer a license. Further, chances are that you will have to pay the package charges every year for company renewal, while yearly renewal costs for direct investments will be lesser than the package charges. Your company setup specialists can also help you determine these costs and assist you in investing smartly.